Evaluate Your Existing Home Loan

Before you apply for Ohio home refinance loans, you will want to evaluate your existing home loan to determine how refinancing will benefit you. Here are four steps to evaluate your current loan.

1. Examine the terms of your existing loan documents. Before you apply for Ohio home refinance loans, pull out the documents for your existing loan and look at the terms. What is your interest rate? Is your loan a fixed-rate mortgage or an ARM? What is your prepayment penalty? This last question is especially important when considering Ohio home refinance loans because most lenders charge a significant penalty for premature payment of a home loan. You have to weigh the cost of this penalty against the savings you will realize with Ohio home refinance loans.
2. Compare current market interest rates with your loan's interest rate. Once you know your current loan's interest rate, compare it with the current market interest rate. If you took out a fixed-rate mortgage a few years ago and interest rates have dropped considerably, your savings with Ohio home refinance loans could be substantial. Keep in mind, though, that the interest rate you qualify for is based on many factors, including your credit history. You can't assume that you will automatically qualify for the lowest possible rate on Ohio home refinance loans.
3. Consider how long you intend to stay in your home. Before you apply for Ohio home refinance loans, think realistically about how long you plan to stay in your current home. If you intend to move within a year or two, refinancing would cost more than it would save you. However, the longer you plan to stay, the more you will save by refinancing.
4. Find your refinancing break-even point. Consider how much you will save per month with Ohio home refinance loans versus you much your new mortgage will cost you, including prepayment penalties from your old mortgage. Figure out how long it will take you to recoup the costs of your new loan and make sure you intend to stay in your home for at least that long.